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September 23, 1998


Asia Pacific Software Showcase
Asia Pacific Software Showcase

The October Revolution: The final ISP guidelines are slated for an October 2 announcement. Then there will be nothing to hold back the Internet horses.The October Revolution: The final ISP guidelines are slated for an October 2 announcement. Then there will be nothing to hold back the Internet horses.

Priya Ganapati in Bombay

The Internet access business in the country has been privatised. But months later, we have still not seen a single ISP opening shop today. That is because the final guidelines for them to operate under were being debated.

Email this story to a friend. Now the differences between the prospective ISPs and the authorities seem to have been resolved. The government is all set to announce the guidelines by October 2, Gandhi's birth anniversary. The announcement is expected to unlock the nearly Rs 1 billion Internet market in the country.

Internet Service Providers Association Secretary Amitabh Singhal told Rediff over the phone from Delhi that "The government is likely to announce the new comprehensive policy by October 2. This was one of the things discussed and decided on in one of the meetings of the task force. I personally agree that October 2 is a very good date."

However, he is quick to contain his jubilation and only grudgingly approves of the new set of guidelines that will be announced.

"The policy that will be announced by the government is as close to being acceptable to the industry as possible. It is not 101 per cent up to the mark. But we are fairly satisfied with it," he gives in.

Some of the announcements that can be expected in the new guidelines are:

  • There shall be no license fee for the first five years and after five years a nominal license fee of Re 1 will be charged.
  • VSNL's monopoly on the international gateway for the Internet shall be withdrawn and authorised public/government organisations would be allowed to provide Internet gateway access directly without going through VSNL gateways.
  • Private ISPs would be allowed to provide such gateways after obtaining defence clearance.
  • Existing email service providers would be able to use the same network to provide Internet access.
  • Any service provider can, without additional licensing, provide access to the Internet through an authorised cable television network.
  • The ISPs would be freely permitted to provide the 'last mile' linkages through either fibre optic or radio communications.

Singhal is clearly quite content with the changes. The issues of applying for licenses to do business or take security clearances to set up gateways do not bother him.

"In the developed countries there is no need of a license to become an ISP. But one has to keep in mind the socio-economic conditions of our country. As much as we would like to, we can't wish DoT away. As for security clearances, it is okay as a timeframe of 45 days has been imposed," he says.

In January 1998, the Department of Telecommunications had announced guidelines for ISP aspirants. The industry was, however, not satisfied with the terms and conditions put forward by the DoT.

"The conditions put forth were not acceptable to the industry. The license agreement was one sided and did not leave much scope for the industry," Singhal complains.

The industry was clearly unhappy with the earlier set of guidelines announced by DoT.

"The agreement had the industry totally dependent on DoT and VSNL (Videsh Sanchar Nigam Limited). There was a problem in the administrative clauses too. DoT and VSNL had no accountability under those guidelines," Singhal alleges.

He also cites instances of the problems faced by companies that had provided email services earlier and plan to become ISPs now.

"Email service providers had to face difficulties in terms of customer service. Those companies that had the traffic for international customers ultimately ended up at the VSNL gateway. Then they had no control over their traffic that led to very bad customer service scenario," he recalls.

The exorbitant tariff charged by DoT was another sore point with the ISPs.

"A typical long-distance 64 KBPS lease line used to cost Rs 28 lakh (Rs 2.8 million) annually. On July 10, DoT brought it down to around Rs 14 lakh (Rs 1.4 million). TRAI in its recently announced proposal has said that it would be fixed at around Rs 92,000. We hope that the new policy will address this issue," Singhal wishes.

The earlier policy that retained DoT's and VSNL's near monopoly over Internet services caused heartburn in the industry that viewed it as an attempt to smother the freedom of the private ISPs.

A peeved Singhal says "What it boiled down to in the earlier policy was that DoT and VSNL would continue to remain the only ISPs. The private ISPs would just remain their franchisees."

The industry then approached the Telecom Regulatory Authority of India that ruled to restrained DoT from selling and processing application forms for ISPs.

This ruling was challenged in the Delhi high court. In a 51-page judgement the court overturned the ruling and allowed DoT to go ahead with its plans to sell application forms to the ISP aspirants.

In the meantime the Prime Minister's National Task Force on Information Technology and Software Development came out with an 'Action Plan' document that suggested sweeping changes to the guidelines announced by DoT.

The government's attempt to bridge the gap between the two policies resulted in a delay in the announcement of a comprehensive set of guidelines for the ISP industry.

But the industry is not complaining. The new set of guidelines would encompass almost all that the industry has wished for.

The industry is thrilled. Companies like Satyam Infoways, Wipro and HCL Comnet are ready to start operations within a month of the announcement of the new policy.

Others are more cautious. Virat Bhatia, head, corporate communications, AT&T, had told Rediff that his company was unlikely to jump into the fray without judging the teething troubles experienced by the first few brave souls.

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